Key Insights for Lenders on Mortgage Pre-Approval Generators

by Chris Brown

A mortgage pre-approval generator is a must-have for any lender. Buyers can use this tool to better understand what they can afford, giving them an edge in a competitive market. Learn about some of the best practices for using a pre-approval generator. 

Types of Mortgage Pre-Approval Tools

Mortgage pre-approval tools come in several types. These are some of the most common tools in use today. 

Mortgage Calculator

Many people just starting out on their homebuying journeys turn to mortgage calculators. A user will enter their basic information into the calculator. They’ll then receive estimates on their purchase budget or monthly payments. 

Mortgage calculators don’t always lead to pre-approvals, but they can encourage customers to take a step toward working with a lender. 

Mortgage calculator app

Mortgage Pre-Qualification Calculator

True, pre-qualification is a much simpler process compared to pre-approval. However, many customers find it helpful to seek pre-qualification to get a ballpark of their purchase budget.

As a lender, you can use a pre-qualification calculator to build your lead pipeline. Collect the customer’s data when they use the form, then follow up via marketing emails to explain more about the process. Buyers who seek pre-qualification through your business will often stick around for the rest of the lending process.

Mortgage Pre-Approval Calculator

A pre-approval calculator will give users a clearer picture of their purchasing budget. This tool will use a borrower’s financial history to create an estimate of their future loan. 

Borrowers gain all the usual benefits of mortgage pre-approval. But as a lender, the pre-approval calculator can help you screen potential clients. For example, do you have a borrower with a poor financial history? Connect them to FHA loans or other affordable programs.

Mortgage Comparison Calculator

What is a mortgage comparison calculator? This tool generates loan information from multiple lenders. Most comparison tools allow buyers to compare lenders based on factors such as:

  • Loan amount
  • Interest rate
  • Loan term

Borrowers get the advantage of finding the best loan option. Lenders can also gain the advantage of showcasing their interest rates and loan terms. 

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Must-Have Features of a Pre-Approval Generator

Generating effective pre-approvals starts by gaining the right information. The more data you can collect from borrowers, the more accurate your pre-approval estimates will be. Here are some of the most important features to look for in a pre-approval generator.

Collect Personal Information

First, a mortgage pre-approval generator must help you get the applicant’s personal information. This includes the customer’s:

  • Name
  • Address
  • Social Security number
  • Driver’s license number
  • Contact details

This information will confirm the borrower’s identity and creditworthiness. 

Loan officers can also use the applicant’s contact information for email marketing. If you’re using a customer relationship management (CRM) platform, it’s even easier. You can have your mortgage CRM send a follow-up email to applicants. This email provides insights into what to expect next in the process.

Verify Documents

To be pre-approved, applicants must submit the proper documents. Mortgage underwriters then check the borrower’s financial information. A pre-approval generator should review documents such as:

  • Pay stubs
  • W-2s
  • Tax returns
  • Bank statements
  • Proof of assets and liabilities

A mortgage CRM can help with this step as well. A borrower portal makes it easy to upload documents. In this way, it streamlines the mortgage pre-approval process.

Analyze Financial Information

Underwriters rely on the applicant’s financial history to determine the pre-approval amount. A pre-approval generator must be able to harvest information that includes the borrower’s:

  • Income
  • Assets
  • Debts
  • Employment history

The more thoroughly the pre-approval generator can review this information, the more the borrower can rely on an accurate pre-approval letter.

Perform a Credit Check

Every pre-approval generator should check the applicant’s credit history. The borrower’s credit score will indicate their creditworthiness. Thus, the score impacts the size of the loan and the interest rate. 

Calculate the Loan Amount

A mortgage pre-approval generator will use the above data to calculate the estimated loan terms:

  • The total loan amount
  • The interest rate
  • The monthly mortgage premium

Borrowers will use this data to more precisely determine their purchase budget. They can also learn how monthly payments will fit into their budgets.

Send a Pre-Approval Letter

Homebuyers use written pre-approval letters to gain leverage in the negotiation process. That’s why you need a pre-approval generator that does more than offer numbers on a screen. Instead, you need a generator that can also send pre-approval letters to your clients. 

The best generators can do so automatically, with features that adapt to every possible client. A good system can also store these letters for future retrieval.

Inform Borrowers of the Validity Period

The pre-approval letter should contain the loan amount. It should also inform borrowers of the validity period. The exact length of this period can vary between lenders, though 90 days is usually the upper limit. Some pre-approvals only last 30 days. 

The mortgage pre-approval generator should be clear about this time frame, as it will impact the borrower’s homebuying journey.

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Mortgage Pre-Approval Best Practices

A pre-approval generator will handle the most basic elements of the lending process. But if you want to take your lending business to the next level, you can adopt strategies to make the process even easier. Here are some mortgage pre-approval tips for your lending practice. 

Offer an Online Customer Portal

The pre-approval process should be simple. An online customer portal provides borrowers with added convenience. They can use the portal to submit documents and track their progress. With the right mortgage CRM, customers can even sign documents electronically. This eliminates the time-consuming need to come to your office.

The same portal also allows you to store and organize important documents. Once the applicant is pre-approved, you can use the same documents to speed up the final approval process.

Consider an Alternative Financial History

Not all applicants have a traditional financial history. Self-employed individuals and contractors, for example, may not have W-2s or pay stubs. This can make the lending process challenging.

You can make it easier. Make sure your mortgage pre-approval generator can evaluate alternative financial documents. These can include bank statements, 1099 contractor forms, or certain types of contracts. This feature will help you expand your lending options to nontraditional applicants.

Integrate Your Pre-Approval Generator and Mortgage Pipeline

A mortgage pre-approval generator is designed to harvest data. And few things are as important to lenders as customer data. That’s why it’s important to integrate your pre-approval process with your mortgage CRM system. Once you harvest customer data, you can drop the customer into your mortgage pipeline.

After all, an applicant seeking pre-approval will be a high-value lead. You can use your CRM system to follow up with the applicant. For example, once they complete the pre-approval application, you can send a follow-up email. In the email, introduce yourself and let them know what to expect from their next steps.

Automate Communications

The lending process isn’t always uniform. That’s even true for the pre-approval process. But every relationship demands clear communication. A mortgage CRM system will allow you to automate client communication.

Applicants can receive emails to let them know they’ve completed a vital phase of the pre-approval process. What if the borrower’s application is missing a document? You can notify them and keep the process moving. 

The faster you can provide pre-approval, the greater your chances of being the lender the applicant chooses for their mortgage.

Tailor Your Solutions to Each Client

With the right platform, you can tailor your solutions to each applicant. The application itself will reveal valuable information about the borrower’s financial situation. Lenders can then use this data to provide customized solutions to each client.

Imagine that an applicant has a less-than-stellar credit history or low income. Does your firm offer loan programs for low-income borrowers (FHA loans, USDA loans, etc.)? If so, you can easily connect that applicant to the right loan program. 

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The Key Features of a Next-Gen Mortgage Pre-Approval Generator

To stay competitive, you’ll need tools that go beyond the basics. The best pre-approval generators now have even more advanced features. Here are some ways an advanced platform can enhance your business.

Dynamic Pre-Approval Letter Generation

The pre-approval letter generator lets you create and store pre-approval letters. Lenders can store letters and adapt them to specific needs. These letters can also be stored. You can refer to them if the applicant proceeds further in the lending process.

Customizable Permissions and Loan Limits

Users get total control over every pre-approval letter. Permissions and limits can be set for each loan. These settings determine who can access and modify loan information. 

Automated Self-Generation

The system can generate letters automatically. Once you set your parameters, the platform will adhere to your guidelines when creating letters. You’ll gain complete compliance with all standards.

Consider a Mortgage CRM

The BNTouch platform can improve your business as well as the customer journey. The BNTouch mortgage CRM already improves tasks like marketing and productivity. Our advanced pre-approval generator will take your business even further. Want to learn more? Contact BNTouch today to schedule your demo. 


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Chris Brown
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